Forex Flash: Majors down on dollar as Italian election weighs - OCBC Bank

Emmanuel Ng of OCBC Bank notes that majors were mixed to lower against the greenback on Tuesday with the Euro continuing to be weighed by Italian political uncertainty.

He feels that primarily the vote highlights widespread disillusion and rejection of EU imposed austerity and today´s 10 year auction looks like being a litmus test for EUR/USD. In the interim, he expects continuing news flow pertaining the formation of a coalition within the divided parliament. Elsewhere, Ng notes that Fed Chairman Bernanke came through as he had suspected and offered no hints of a concerted shift within the Committee to consider an exit from an ultra accommodative stance. On other fronts he writes, “NZD/USD tripped below 0.8300 on cited position adjustments (note also the latest trade deficit) on the back of risk aversion.”